1. Definition of the Term / Concept
A cease and desist order is a binding directive issued by the CCI requiring a party to immediately discontinue a specific anti-competitive practice and refrain from repeating it. This remedial instrument represents one of the most fundamental enforcement tools available to the CCI, serving as the primary mechanism for bringing anti-competitive conduct to an end and restoring competitive market conditions.
The statutory basis for cease and desist orders is found in Section 27(a) of the Competition Act, 2002, post the completion of the investigative and adjudicatory process. The order is reinforced by Section 42 of the Act, which provides for penalties in cases of non-compliance. This deterrent framework ensures that cease and desist orders carry substantive coercive force.
2. Commentary
Remedial Purpose and Nature
Cease and desist orders are fundamentally forward-looking remedies, designed to secure future compliance and restore competitive market structures. Unlike monetary penalties under Section 27(b), which serve punitive and deterrent functions by imposing financial sanctions on past conduct, cease and desist orders operate to alter future behaviour.
The CCI has often issued cease and desist orders without monetary penalties where enterprises demonstrated contrition and cooperated with the investigation. The CCI’s jurisprudence on cease and desist orders can be seen from a few practical use cases:
Table Tennis Federation of India (TTFI) Case1 (2024) – In this matter, the CCI found the TTFI and its affiliate bodies dominant in the relevant markets for the organisation of table tennis leagues/events/tournaments and the provision of services by players, and in contravention of Sections 3(4) and 4 of the Act, by denying access to players for other tournaments. However, the Commission acknowledged that TTFI and its affiliate bodies had undertaken substantial corrective measures during the investigation, withdrawing anti-competitive communications, amending or removing restrictive clauses from their governing documents, and issuing advisories for promoting open competition. Recognising these remedial steps, the CCI issued a cease and desist order under Section 27 and refrained from imposing monetary penalties.
Automobile Aftermarket Cases2: The CCI has also issued cease and desist orders in the automobile aftermarket sector, directing original equipment manufacturers to desist from practices that foreclose the supply of spare parts and diagnostic tools. These orders have sought to open aftermarkets to independent repairers, thereby enhancing consumer choice and competition. The Commission’s orders have typically required incumbents to provide access to spare parts and technical information on non-discriminatory terms, demonstrating the use of cease and desist orders to restructure markets and promote competition. The CCI has also developed mechanisms for monitoring compliance, including the requirement that enterprises submit periodic reports confirming adherence to cease and desist directives.
MSME Cases – The CCI has demonstrated a nuanced and proportionate approach towards Micro, Small and Medium Enterprises (MSMEs) found to have contravened the Competition Act. Recognising the economic vulnerabilities of such enterprises, the Commission has often refrained from imposing monetary penalties, issuing only cease and desist orders under Section 27. In the Kraft Paper Manufacturers3 cartel matter, the information was filed by corrugated box manufacturers, who alleged that the kraft paper manufacturers, through periodic meetings and correspondence, directed their members to increase prices and create artificial shortages to enforce unjustified price increases. The evidence included minutes of meetings, email communications, and WhatsApp messages. Keeping in mind that many of the kraft paper manufacturers were MSMEs and were facing an economic and financial crisis as a fallout of the COVID-19 pandemic, the CCI refrained from imposing any monetary penalty and issued only a cease and desist order to all the 119 Opposite Parties that were held in contravention of the Act. Similarly, in the Eastern Railway Axle Bearings4 cartel matter, the CCI found eight MSMEs guilty of bid rigging and cartelisation in the supply of axle bearings to Eastern Railways. The evidence included emails, call detail records, and statements of representatives demonstrating coordination on price determination, tender allocation, and bid manipulation. However, the CCI refrained from imposing any monetary penalty, considering that the firms were MSMEs with limited staff and turnover, the cooperative and non-adversarial approach adopted by the firms in acknowledging their involvement, and the economic stress wrought upon the MSME sector in the wake of COVID-19. The Commission observed that imposing a penalty might render these firms economically unviable or force them to exit the market, thereby further reducing competition. Accordingly, the CCI issued only a cease and desist order under Section 27(a).
TT Friendly Super League Association v Table Tennis Federation of India, Case No. 19 of 2021 (Competition Commission of India, 12 December 2024).↩︎
Shamsher Kataria v Honda Siel Cars India Ltd and Others (Main Order), Case No. 03 of 2011 (Competition Commission of India, 25 August 2014); Shamsher Kataria v Honda Siel Cars India Ltd and Others (Order against Hyundai, Reva and Premier), Case No. 03 of 2011 (Competition Commission of India, 27 July 2015).↩︎
Federation of Corrugated Box Manufacturers of India v Gujarat Paper Mills Association and Others, Case No. 24 of 2017 (Competition Commission of India, 12 October 2022).↩︎
Eastern Railway, Kolkata v Chandra Brothers and Others, Ref Case No. 02 of 2018 (Competition Commission of India, 12 October 2021).↩︎
